Mahmoud Ahmadinejad brushes off EU sanctions on Iran oil

President Mahmoud Ahmadinejad has brushed off the threat posed to the Iranian
economy by tighter sanctions including a European oil embargo even as he
demanded the resumption of talks on its nuclear ambitions.

Iran's hardline leader said sanctions would not damage an economy that has dramatically reduced its exposure to European trade in favour of Asian trade.

Sanctions measures adopted by the EU on Monday raised the prospect that Iran would loose some of its main markets for oil exports. European foreign ministers embraced the embargo to increase pressure on Iran to return to negotiations over its nuclear programme.

But the Iranian leader claimed the measure would only hurt the European economy.

"There was a time when 90 per cent of our trade was with the Europeans. It has now dropped to 10 per cent. We didn't call for this. Cut it (trade) and let's see who will incur the loss," he said. "It is the West that needs Iran and the Iranian nation will not lose from the sanctions."

The comments strengthened fears that Iran would unilaterally halt oil sales to Europe, upending a compromise struck in Brussels that allowed Greece and Spain and other exposed economies to continue taking Iranian supplies for six months.

A bill to be brought before parliament on Sunday would ban the sale of oil to Europe, a move that would disrupt the continent's most vulnerable economies. "All European countries that made Iran the target of their sanctions will not be able to buy even one drop of oil from Iran and oil taps will be turned off to them so that they will not play with fire again," said Nasser Soudani, an MP.

Mr Ahmadinejad painted Iran as the wronged party in the dispute, claiming it was open to talks with Europeans and permanent members of the security council.

"They claim that Iran doesn't want negotiations but it isn't so," he said. "Every time they seek pretexts and as we approach talks they issue resolutions so that perhaps negotiations don't take place."

However Germany and Israel claim Iran has not sincerely responded to its demands that the talks be held with preconditions.

German Chancellor Angela Merkel and Israeli Prime Minister Benjamin Netanyahu urged Iran to "accept the outstretched hand of the international community" in a phone call.

Gulf officials issued fresh assurances to international markets that the flow of oil from the region can continue even if Iran carries out its threat to disrupt the Straits of Hormuz.

"Iran is capable of fomenting tension in the region," said Dahi Khalfan, Dubai's chief of police. "We in the Gulf have cards in our hands that allow us to marginalise the role of the strait and undermine its importance."

"We tell Iran if you try to close this place, we will open the other gates and nullify the importance of the Strait of Hormuz," he added.

Carl-Henric Svanberg, the chairman of BP, said there should be no need for European countries to tap strategic oil reserves after the embargo cuts off supplies from Iran at midyear.

"Generally the industry, including all the oil-producing nations, has shown the capability of adjusting for moments of up and down and I think that's what you're going to see this time as well," Mr Svanberg said